Not Taking Stock

In a cooling market, private-equity firms
are seeing new merit in buying small companies' debt

By

Jeff D. Opdyke

Updated March 27, 2002 12:01 a.m. ET

These days, private equity is a bit of a misnomer.

Back in the good ol' days -- early 2000 -- private-equity firms were eager deal makers, trading billions of dollars of cash for equity stakes in thousands of public and private companies. Today, though they're still investing, the pace of the deals has slowed.

The cumulative value of the transactions has plunged, and private-equity firms, in many cases, have recast their...